Are property losses from Hurricane Harvey tax deductible?

September 8, 2017Updated: September 8, 2017 3:07pm

Photo: BRYAN THOMAS, STR

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Adrian Galindo cleans up a home in the Kashmere Gardens neighborhood of Houston, Sept. 2, 2017. A week after Texas was slammed by Hurricane Harvey, this region was still engulfed in crisis on Saturday, with weary residents of Houston searching for ways to repair swamped homes and salvage possessions. (Bryan Thomas/The New York Times) less

Adrian Galindo cleans up a home in the Kashmere Gardens neighborhood of Houston, Sept. 2, 2017. A week after Texas was slammed by Hurricane Harvey, this region was still engulfed in crisis on Saturday, with ... more

Photo: BRYAN THOMAS, STR

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FILE - Workers begin repairs to a wall that was lost in the wake of Hurricane Harvey, Wednesday, Aug. 30, 2017, in Rockport, Texas. University of Miami senior hurricane researcher Brian McNoldy said even though coastal cities like Rockport were all but flattened, ÂUnfortunately, theyÂre going to take backstage to Houston.Â (AP Photo/Eric Gay) less

FILE - Workers begin repairs to a wall that was lost in the wake of Hurricane Harvey, Wednesday, Aug. 30, 2017, in Rockport, Texas. University of Miami senior hurricane researcher Brian McNoldy said even though ... more

But the rules are complicated. It's not a simple write-off to compensate taxpayers for the money they had to pay for damages that insurance didn't cover.

Instead, the IRS requires taxpayers to calculate the difference in the fair market value from before the flood to after the flood and then subtract any insurance payments. Fair market value reflects the price a willing seller could expect to receive from a willing buyer.

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The total is then adjusted further downward by subtracting 10 percent of adjusted gross income. The IRS also requires taxpayers to subtract $100 for each loss.

Say, for example, you're out of pocket $10,100 after insurance paid its portion. Subtract $100 from the loss, and you're left with $10,000. Then subtract 10 percent from your adjusted gross income of $40,000, or $4,000. You can claim a deduction of $6,000.

To receive the deduction, taxpayers must itemize. Those who take the standard deduction are not eligible. Taxpayers must also file a timely claim with their insurance company for reimbursement if they have insurance, according to the IRS.

Other disaster related expenses such as moving and storage, buying generators and renting temporary housing are not eligible to be included in the loss calculation, according to the tax preparation software TurboTax.